interim report - cisionmb.cision.com/main/740/2327483/710538.pdf · january 1–june 30, 2017...
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INTERIM REPORT January 1–June 30, 2017
Price-sensitive information that has to be reported to the Swedish Financial Supervisory Authority
1 (24)
Interim report
Second quarter April 1 – June 30, 2017
> Net sales totaled SEK 613 m (578)
> Operating profit amounted to SEK 55 m (62)
> The operating margin was 9.0% (10.7)
> Profit after tax was SEK 41 m (62)
> Earnings per share were SEK 0.40 (0.60)
Accumulated January 1 – June 30, 2017
> Net sales totaled SEK 1,234 m (1,104)
> Operating profit amounted to SEK 130 m (96)
> The operating margin was 10.5% (8.7)
> Profit after tax was SEK 95 m (86)
> Earnings per share were SEK 0.93 (0.83)
> Cash and cash equivalents totaled SEK 56 m (64)
Statement by Carl-Magnus Månsson, CEO
A continued healthy financial trend with strong growth and rising profits was posted for the first half of the
year. Altogether, we grew our sales by 12 percent to SEK 1,234 m and increased profits 35 percent to SEK
130 m. At 10.5 percent, our operating margin is the highest ever for the first six months of the year. In the
year’s second quarter, we grew our sales to SEK 613 m, our highest second quarter sales to date, despite
the negative effect of fewer working days compared with last year.
The positive financial trend is a result of our capacity to develop and thereby remain relevant for customers,
partners and employees.
Acando’s innovation survey was launched during the quarter, and clearly shows that many larger
companies are focusing their innovation capacity on increasing their customer relevance in a world that is
rapidly and continuously changing, not least due to all the possibilities opened by digitalization. Acando’s
strategy of combining technology, as the driver, together with behavioral insights is thus becoming
increasingly relevant. The acquisitions of Transformator Design and Daytona strengthen our capabilities in
terms of understanding the customer perspective and securing capacity to design a full omnichannel
customer experience, digital and analog. Altogether, this gives us a unique position from which we can not
only support definitions of strategies with a strong customer focus, but are also able to realize these through
transformative projects ranging from the creation of in-house digital capabilities to the realization of
technical solutions. Our compiled expertise makes us unique in the Nordic market.
Acando’s strategy of providing customers with a unique possibility for capitalizing on our partner
relationships is based on a portfolio of strong, relevant partners and long-standing partner relationships.
During the quarter, we expanded our partner portfolio to strengthen our capabilities in the retail/fashion
segment and in the cloud-based business systems solution area, both of which are experiencing vigorous
growth. More importantly, we were presented with the Partner of the Year award for Sweden by Microsoft
for our ability to create innovative and transformative solutions based on Microsoft’s products and services.
Moreover, Acando has once again been chosen as an Inner Circle Partner for Microsoft Dynamics, an
exclusive global selection of Microsoft’s most strategic partners.
Our success relies entirely on our employees’ ambition and capacity to create relations of trust with our
customers and their employees. These relationships engender the security to challenge one another and,
through shared experiences, abilities and skills, to identify innovative solutions and approaches. We are
growing and take pride in the increasing numbers that wish to join us and to continue this quest of creating
the most challenging and developing environment for those that have the desire and the courage to match.
INTERIM REPORT January 1–June 30, 2017
Acando AB (publ.)
www.acando.com 2 (24)
Significant events during and after the quarter
Acando in Norway won a framework agreement for consulting services with the Brønnøysund Register
Centre (Norwegian company registrations office). The agreement covers the development of a new
electronic case management system for registry operations. The project’s main concept is to develop a
new digital registry platform. The aim is to replace outdated system solutions in time to ensure the continued
ability of the Brønnøysund Register Centre to provide good registry services, adapted to new requirements
and expectations as a result of the transition to digital administration. The contract is for three years with
an option to extend for a maximum of four further years.
After the end of the period, Acando signed agreements to acquire the two companies Transformator Design
and Daytona on September 1. The companies will together with Acando create offerings within strategy,
design, tech, innovation, change management and communication. Acando gains 60 more employees, who
will contribute by creating strategies and designing solutions based on customers’ needs for all channels.
The new operations will be consolidated into the Acando Group from September 1, 2017.
Acando has won the Microsoft Partner of the Year Award 2017 for Sweden. The Microsoft Partner of the
Year awards are presented to those Microsoft partners who have developed and delivered exceptional
Microsoft-based solutions over the last year. Acando was recognized for providing first-class solutions and
services, and for representing a strong corporate partner in Sweden. The awards are presented for a
number of categories, with the winners chosen from a base of more than 2,800 participants representing
115 countries around the world.
Acando was chosen to join Microsoft’s Microsoft Dynamics Inner Circle. The Inner Circle comprises an
exclusive, strategic selection of Microsoft partners, which have won acclaim through strong customer
relationships and successful projects. This provides Acando with the possibility of providing its customers
with even better support in close collaboration with Microsoft.
Business activities
Introduction
Acando is a consulting company that leverages an equal balance of specialist technical expertise and
human behavioral insight to innovate, streamline and mobilize organizations for sustainable change. Our
customers come from every sector and include a mix of major global organizations as well as medium-
sized regional companies. We operate in a Northern European market with offices in Sweden, Finland,
Norway, Germany and Latvia, and have a total of 1,700 employees.
INTERIM REPORT January 1–June 30, 2017
Acando AB (publ.)
www.acando.com 3 (24)
Acando’s offering
Acando’s offering is focused on actual results and value for the customer. This value is achieved through
a combination of all of Acando’s skills and our long-term relationship with the customer. Well-established
methods and tools are in place to be able to deliver Acando’s high level of quality in each phase of the
project.
The Nordic market is mainly built on numerous small to medium-sized local IT and management consulting
companies as well as a few major global suppliers with a focus on outsourcing. Acando is the only Swedish
company with a sufficiently broad skills base and size in business systems, management and digital
solutions to be able to successfully compete with the major international companies in complex project
implementations.
Acando’s core offering is divided into four main categories:
Digital guides customers and realizes solutions linked to digital innovation and transformation. Projects are
driven by a combination of digital business understanding and deep technical know-how in solutions based
on modern technology and platforms. The area has substantial growth potential and Acando is well-
positioned in several of the most rapidly growing areas in terms of user-centric solutions and digital product
innovation as well as industrial transformation through digitalization. We are entering a new era, when work
processes are partially replaced or expanded with digital solutions, which means that IT is no longer just
business support, but also functions as an expansion or integrated part of our customers’ processes,
products, services and entire business. Acando’s digital innovation agency, Itch, is a key element in
developing Acando’s offering within digital services and product innovation.
Consulting is active in all major industries and offers in-depth expertise in Strategy, Operational Control,
Sales & Marketing, Supply Chain and Operations. Acando’s broad knowledge base and cross-functional
business teams ensure a holistic perspective and good understanding of the customers, which means that
we can offer innovative perspectives and solutions that generate unexpected added value. Acando’s
absolute strength is the transformation process and its high speed of implementation.
Enterprise is the leading Swedish supplier of platform-related services on selected platforms: SAP,
Dynamics AX and Netsuite. Together with our customers, we ensure that maximum value is created from
platform investments. We combine extensive operational expertise and well-tried methodology with
functional and technical platform competence.
Application Services primarily includes longer commitments for administration and support services. Over
time, Acando aims to grow the share of assignments primarily linked to the existing customer base and
delivered projects.
Each business area’s share of Group sales is shown below.
INTERIM REPORT January 1–June 30, 2017
Acando AB (publ.)
www.acando.com 4 (24)
Customers and segments
Acando’s position with a healthy spread over different customer segments creates the preconditions for
long-term, stable growth and provides the possibility of better balancing demand patterns between different
segments.
Acando traditionally has a strong position in the manufacturing industry with both efficiency and business-
development assignments. The segment also includes a strong position in the automotive industry in both
Sweden and Germany, and with intelligent transport system assignments in Norway. A high level of
innovation and efficiency enhancement in traditional industrial companies is enabled by digital capabilities
in product content, such as business models and processes. Acando is well-positioned to create completely
new possibilities in the segment, together with its customers, through a combination of transformative
implementations and deep technical expertise.
The company’s position in the retail segment is strong with an offering where digital customer interaction
and e-commerce drive development. Changed customer interaction patterns also create the need for a
more flexible and agile supply chain together with associated system and process changes. Acando has
major full-service assignments with several Swedish retail chains and a growing customer base in Germany
and Norway.
In the financial segment, particularly banking and insurance, a continued increase in demand has been
noted as a result of the need for modernization in terms of technical platforms and digital relationships with
customers. In combination with regulatory requirements, this gives rise to the need for structured
transformation programs at many companies in the sector. In several cases, Acando runs assignments
linked to leading the transformation and development of digital services, particularly in Sweden and
Germany.
The energy segment is typified by a need for streamlining and change driven by electricity prices and
external factors. In parallel, new distribution forms, advanced control and measurement systems, and more
highly integrated services aimed at customers are increasing the need for more advanced digital platforms.
Acando has extensive experience and a strong position with several of northern Europe’s largest energy
companies as well as a number of smaller local companies.
The public sector remains a key growth area and Acando’s service portfolio and geographic spread make
it well-suited to meet the needs of public authorities, agencies and municipalities. Growth is driven by
demands for efficiency, increased transparency and digital interaction with citizens. Acando’s strong
position in Norway comprises the base for continued expansion in terms of content and geographical
coverage.
The health care segment remains at an early stage of implementing digitalization. Investments are focused
on efficient information management, new methods with clear digital components and a greater degree of
digital interaction. Acando aims to capture a leading role and has a number of key assignments in the
segment in both Sweden and Norway.
INTERIM REPORT January 1–June 30, 2017
Acando AB (publ.)
www.acando.com 5 (24)
The telecoms segment is characterized by clear efficiency enhancement and streamlining programs using
standard platforms and simplified operating models in parallel with defining new services that add greater
value. The media and entertainment segment is driven by expansive digital services and the need to interact
with consumers and professional operators. Acando’s main position is linked to the operator segment.
See below for the share of sales by customer segment.
Second quarter market trend
Demand remained healthy in Sweden through H1 2017. All regions in Sweden trended positively, primarily
driven by the increasing need for digitalization. In Germany, demand remained normal during the period.
The market in Norway was characterized by continued public sector investments in parallel with a gentle
recovery in oil-related sectors. The weakest market is Finland, where the market remains cautious albeit
with a slight positive trend.
Long-term demand is expected to remain favorable across Acando’s markets, driven by accelerating digital
transformation, digital content in products and services, and completely new application areas for
technology in business processes. Accordingly, it will become crucial to create clear links between strategy,
innovation, implementation, user behavior and technology.
INTERIM REPORT January 1–June 30, 2017
Acando AB (publ.)
www.acando.com 6 (24)
Net sales and earnings
Second quarter April–June 2017
Net sales and operating profit before amortization and impairment of intangible assets (EBITA) for Q2 2017
are shown in the table below:
Consolidated net sales for the quarter amounted to SEK 614 m (579). EBITA was SEK 56 m (61),
corresponding to a margin of 9.1 percent (10.7).
Earnings were down slightly year-on-year, however, Easter was in the second quarter this year as
compared with the first quarter in 2016. The decrease in working days during the quarter was assessed as
impacting sales by 5 percent.
Consolidated profit after tax totaled SEK 41 m (62). Earnings per share after dilution amounted to SEK 0.39
(0.60) and SEK 0.40 (0.60) before dilution.
Accumulated January–June 2017
Net sales and operating profit before amortization and impairment of intangible assets (EBITA) for Q2 2017
are shown in the table below:
Consolidated net sales for H1 amounted to SEK 1,234 m (1,104). EBITA was SEK 131 m (95),
corresponding to a margin of 10.6 percent (8.6).
Earnings were up year-on-year, partly due to the year starting with significantly improved utilization rates in
all Sweden and in Germany compared with the start of 2016. The strong growth of the Norwegian
operations has affected the utilization negative during H1. Growth in local currency for the Acando Group
was 10.1 percent.
Consolidated profit after tax totaled SEK 95 m (86). Earnings per share after dilution amounted to SEK 0.91
(0.83) and SEK 0.93 (0.83) before dilution.
SEKm 2017 2016 2017 2016 2017 2016
Sweden 407.5 399.1 49.9 51.0 12.2% 12.8%
Norway 104.6 91.1 5.0 10.0 4.7% 11.1%
Germany 101.6 86.6 7.6 7.4 7.5% 8.6%
Discontinued operations - - - - - -
Group adjustments -0.1 2.0 -6.9 -7.0 - -
Total 613.6 578.8 55.6 61.4 9.1% 10.7%
Net sales EBITA EBITA margin.
SEKm 2017 2016 2017 2016 2017 2016
Sweden 809.0 765.5 104.3 79.7 12.9% 10.4%
Norway 221.5 176.6 17.2 18.4 7.7% 10.4%
Germany 204.4 168.8 22.6 13.7 11.0% 8.1%
Discontinued operations - 3.1 - -3.9 neg. neg.
Group adjustments -0.4 -9.6 -13.5 -12.5 - -
Total 1,234.4 1,104.4 130.5 95.4 10.6% 8.6%
Net sales EBITA EBITA margin.
INTERIM REPORT January 1–June 30, 2017
Acando AB (publ.)
www.acando.com 7 (24)
Seasonal variations
The graph on the right shows net sales and
operating profit for the past three years.
In terms of work, the fourth quarter is the most
work-intensive with the highest number of
working days. The third quarter is always lower
due to vacation. The calendar effect from Easter
results in a shift in working days between the first
and second quarters, with Easter taking place in
Q2 2017.
The industry in which Acando operates is late-
cyclical and a weak market impacts with a delay
of about one quarter. The same applies when the
market turns.
Development of operations by geographic market
Sweden
Demand remained unchanged in Sweden with healthy market conditions in all skills areas. The geographic
areas of Gothenburg and Stockholm continued to trend extremely favorably with healthy profitability and
continued growth. The Malmö region and Västerås also continued to trend positively during the quarter.
Demand was mainly driven by digitalization and innovation, but also by efficiency enhancements and the
creation of sustainable foundations for continued development through more highly scalable and modern
platforms. Both major established customers and new customers in both traditional industries and new
segments have a notable need to understand and realize digital opportunities.
In June, Acando published a new survey covering innovation in large traditional companies. To obtain a
detailed picture of innovation and digitalization, Acando has interviewed innovation managers, strategy
managers and leaders at several of Sweden’s largest companies to identify how they work with and
approach innovation. The findings have now been published in the Acando Innovation Study 2017.
Essentially, every company included in Acando’s survey indicated that their innovation efforts were driven
by the need to retain relevance for their customers — and the focus is always on understanding customers’
desires rather than any threat from new competitors. Traditional companies often have a hierarchical
structure with complex governance models — models that almost never support innovation. Success
requires identifying models that give the organization mandates. Acando’s survey also found that the
greatest challenge with innovation is to scale up the idea, productize it and then industrialize the service,
and sell it on a large scale. Companies often underestimate the time and energy that is actually required to
launch a new service. Additional resources can be allocated to market surveys and market testing to better
understand customers’ desires and willingness to pay.
INTERIM REPORT January 1–June 30, 2017
Acando AB (publ.)
www.acando.com 8 (24)
In segments that focus on consumers and users, such as the service sector, banking/finance, retailing and
the public sector, there is a clear focus on user experience across all channels, both digital and physical.
Following the end of the quarter, Acando acquired Transformator Design and Daytona to complement and
strengthen its positions in customer-driven strategy, service design and user experience. Combining the
capabilities of Transformator Design and Daytona with Acando’s units specialized in strategy,
transformation and digital development as well as Acando’s innovation agency itch, will create a strong
range of offerings within customer experiences. The new business will combine empathy and deep
understanding for human needs with innovative and technical solutions. The merged business, of which
Acando’s innovation agency is also a part, will have 160 employees in total and together create Sweden’s
largest Business Design Studio with offerings within strategy, design, tech, innovation, change
management and communication.
In September this year, the rules governing the duration of the home rents negotiation process will change.
Together with one of Sweden’s largest tenant organizations, Acando is developing a digital negotiation
portal to streamline the process. The main task of the tenant organization is negotiating rent for more than
500,000 members. Previously, this has been an analog process and has largely been conducted manually.
Acando will prepare a digital solution in the form of a negotiation portal that streamlines the work and which
is adapted to users’ specific desires and requirements.
Acando has completed an in-depth study of Swedish loyalty programs. The study included interviews with
20 leading companies in various segments of the retail sector. The study’s findings question whether all the
discounts and points distributed are really necessary, or whether they just undermine profitability. Increased
competition in the retail market is making it increasingly difficult to create customer loyalty. Discounts and
points no longer suffice to make customers appreciate loyalty programs. Instead, new ways to avail oneself
of benefits and new types of non-monetary benefits are more highly valued. The study’s main findings
revolved around strategic maturity, program structures, tools and processes as well as the ability to
measure profitability. Many participants lack a clear loyalty strategy to base their actions on, which means
that loyalty programs are instead used as marketing channels which can irritate members. The key is the
ability to utilize existing and new data in a manner that is relevant for customers. Through improving at the
analysis and processing of data, companies can become better at understanding their customers’ desires
and behavior, and based on this understanding, create relevant and personal offers.
Projects and studies on data-driven processes are continuously on the rise. Several smaller assignments
covering the basic requirements for organizations to become more data-driven in their decision-making and
best practices for implementing processes were initiated during the quarter. Interest and volumes are
increasing in the entire Acando Analytics area, where we have concentrated traditional information
management, analysis and more advanced services in machine learning and artificial intelligence. Typical
projects in this area cover how customer data can be better utilized to create an optimal experience, how
maintenance processes can be enhanced, and how structured and unstructured data can be used in shared
models.
Dynamics 365, which is part of the Enterprise offering, has continued to trend strongly in both CRM and
AX-related assignments. Acando’s ability to combine solution and implementation expertise has proved
decisive in a number of successful projects, which also included advising on business models and
processes as part of Acando’s integrated offering. The utilization rate is high and continued recruitment will
be decisive in defending our position as the leading Swedish Dynamics partner. During the quarter, Acando
was rewarded with several prestigious awards including, Microsoft Partner of the Year for Sweden and was
chosen to join the Microsoft Inner Circle, an exclusive group comprising Microsoft’s key strategic partners.
Several new projects were initiated in the quarter and, at the same time, the base of customers for which
INTERIM REPORT January 1–June 30, 2017
Acando AB (publ.)
www.acando.com 9 (24)
Acando is responsible for their further development is growing. New customers came mainly from the retail
and industry segments.
Norway
Acando’s operations in Norway are continuing to develop favorably, in terms of growth and the nature of
assignments. Several of the Group’s investment areas are based in Norway, which negatively impacted
utilization rates during H1 in parallel with a continued high rate of recruitment. In the Intelligent
Transportation System, Machine Learning and Industrial IoT areas, Acando Norway is building cutting-edge
skills with several interesting projects that position Acando with customers as well as positioning Acando
as a natural and innovative workplace for the most talented employees.
The market remains healthy and demand is expected to stay unchanged throughout the year. A slight
increase in the willingness to invest was noted in the offshore and oil industry. Acando holds a strong
position in the public sector with a broad framework agreement portfolio that allows expertise-driven
business and project assignments. The framework agreement with the Brønnøysund Register Centre
(Norwegian company registrations office), whereby Acando will develop a new platform for a fully digitalized
administration, is evidence of Acando’s position.
Acando Norway has signed an agreement with Nordbohus for the digitalization of work flows. The
construction industry has a general need for digitalization and simplification of processes. The Digital Site
project is a collective name for the entire solution, which in addition to work-related processes also
encompasses quality, sales support, project hotels and integrations with e-mail and other professional
systems.
Germany
Operations in Germany continue to develop with healthy profitability and growth, and where positive trends
were reported for all geographies. The market remains healthy and is expected to stay unchanged
throughout the year. High demand exists in several of Acando’s core areas and is driven by modernization
programs in several industry segments.
Acando Germany has developed a tailormade planning solution for CBR Fashion. The solution optimizes
delivery capacity and allows exact forecasts for sales and demand. The solution calculates recommended
future orders with suppliers to ensure optimal inventory levels. This project is on example of Acando’s
strong position in complex digital supply chain solutions in the fast-moving fashion industry.
Acando Germany has also won projects for on-line banking services and for the design of an e-commerce
solution for a well-known e-commerce site. Acando has also won a contract to design a mobile application
for the administration of road tolls, to simplify payment administration for end-users. The project also
includes a solution for an invoicing and accounting system, which shows the importance of a full-range
portfolio offering. The project confirms Acando Germany as a leading supplier of digital services in retail
and banking/finance.
The automotive and telecoms segments continue to develop favorably with new assignments at existing
customers.
INTERIM REPORT January 1–June 30, 2017
Acando AB (publ.)
www.acando.com 10 (24)
INTERIM REPORT January 1–June 30, 2017
Acando AB (publ.)
www.acando.com 11 (24)
Financial information
Financial position
Acando has a strong financial position with an equity/assets ratio of 64 percent (64). Consolidated cash
and cash equivalents amounted to SEK 56 m (64) at June 30, 2017. In addition, the Group has unutilized
overdraft facilities of SEK 180 m (180), of which SEK 64 m (50) was utilized at June 30, 2017.
Cash flow
During the first half of 2017, the total cash flow was a negative SEK 16 m (neg: 31). Cash flow from
operating activities of SEK 96 m (60) comprised cash inflows from operations of SEK 123 m (95) and a
negative change in working capital of SEK 27 m (neg: 35).
Cash flow from investment activities amounted to an outflow of SEK 19 m (outflow: 4) and pertained mainly
to investments in customary IT and office equipment.
Cash flow from financing activities amounted to an outflow of SEK 93 m (outflow: 87), of which an outflow
of SEK 134 m (outflow: 123) pertained to dividends, an outflow of SEK 14 m (outflow: 19) comprised
amortization of borrowings and an inflow of SEK 55 m pertained to change in utilization of overdraft facilities.
Tax
The Group recognized a tax expense of SEK 34 m (26) for H1. This recognized tax expense corresponded
to a tax rate of 26.4 percent for the period. The tax rate is affected by the share of earnings contributed by
the respective countries, since tax rates differ between the countries. Previous Swedish loss carry-forwards
were exercised in full in 2016 and, at the end of the year, there were no remaining loss carry-forwards
reported.
Jun 30 Jun 30 Dec 31
SEK m 2017 2016 Change 2016
Cash & cash equivalents 56 64 -8 99
Interest-bearing short-term debt -83 -77 -6 0
Interest-bearing long-term debt 1) -28 -41 13 -42
Net cash -55 -54 -1 57
Unutilized overdraft facility 116 130 -14 67
Equity/assets ratio 64% 64% 1% 66%
1) Interest-bearing debt applies to pension commitments of SEK 28 m
Jan-Jun Jan-Jun Full year
SEK m 2017 2016 Change 2016
Cash flow from:
Operating activities 96 60 36 124
Investment activities -19 -4 -15 -14
Financing activities -93 -87 -6 -140
Total cash flow -16 -31 15 -30
Cash and cash equivalents at the
beginning of the period 72 93 -21 93
Translation difference in
cash and cash equivalents 0 2 -2 9
Cash and cash equivalents at the
the end of period 56 64 -8 72
INTERIM REPORT January 1–June 30, 2017
Acando AB (publ.)
www.acando.com 12 (24)
Investments
The Group’s net investment in assets in the first half of 2017 was SEK 13 m (11). The investments pertained
to tangible and intangible assets. On March 1, Acando moved to new premises in Stockholm which resulted
in higher investment levels year-on-year.
The share
Share capital and shares
On June 30, 2017, the number of shares in Acando amounted to 104,407,419 shares, of which 1,542,000
Series B shares were treasury shares and comprised 1.5 percent of the total number of shares. These
treasury shares are expected to be used for future allotment in ongoing share-savings programs.
Buy-back of shares
Acando’s Board was authorized by the 2017 Annual General Meeting (AGM) to buy back the company’s
shares to the extent that the company’s total holding does not exceed 10 percent of all shares in the
company with the aim of adjusting the capital structure to suit the company’s capital requirements and to
create the opportunity for the company to pay for any acquisitions of companies and businesses, wholly or
partly, with these treasury shares. The authorization is valid until the 2018 AGM.
On June 30, the total holding of treasury shares amounted to 1,542,000 shares and comprised 1.5 percent
of the total number of shares outstanding. No buy-back of treasury shares was implemented on the back
of this authorization from the 2017 AGM.
Share-savings programs
At June 30, 2017, Acando had five share-savings programs outstanding of which two will close during 2017.
The programs one to four are described in Acando's Annual Report 2016 on page 58.
The 2017 AGM resolved to implement a new share-savings program for a maximum of 50 senior executives
and other key personnel employed by the Acando Group. The 2017/2020 share-savings program is
structured similarly to the share-savings programs that were adopted by the 2014, 2015 and 2016 AGMs.
Based on the fulfillment of specific performance criteria related to Acando’s earnings per share before tax
and after dilution for the 2017–2019 fiscal years, participants will have the option of receiving, without
compensation, additional Acando shares, the number of which depends on the number of Acando shares
in their own investment and on the fulfillment of certain performance requirements.
Employees
The number of employees at the end of the quarter was 1,785 (1,593). Of these, 1,069 (1,022) were in
Sweden, 383 (311) in Germany, 255 (193) in Norway and 78 (67) in Other countries. The average number
of employees during the second quarter of 2017 was 1,768 (1,677).
Parent Company
The Parent Company provides certain Group-wide functions to other companies in the Group. Essentially,
the risks faced by the Parent Company consist of operations conducted in the subsidiaries (see the
description below for the Group).
The Parent Company’s financial position is stated on page 21.
INTERIM REPORT January 1–June 30, 2017
Acando AB (publ.)
www.acando.com 13 (24)
Acando’s financial targets and dividend policy
Acando’s financial targets are divided into four sections:
Growth
In the markets in which it operates, Acando will grow faster than the market for management and IT
consulting services, primarily through organic growth complemented by strategic acquisitions.
Margin
Acando’s margin target is to reach a sustainable operating margin in excess of 10 percent, measured as
operating profit before amortization of intangible assets (EBITA) as a percentage of net sales.
Earnings per share
Acando’s principal financial target is to increase earnings per share (EPS) by at least 10 percent per year.
Debt/EBITDA ratio
Net debt as a percentage of EBITDA should maintain a value of less than 1.5.
Acando’s dividend policy is as follows:
Not less than half of profit after tax is to be distributed to shareholders by way of dividends, share buy-
backs or other corresponding measures.
Outlook
Acando will continue to develop as a company in pace with its customers and their demands. The
company’s overall assessment is that demand in the markets where the company operates is adequate,
and is primarily driven by an increasing need for digitalization. The company holds a leading position in the
northern European market for Digitalization, Business System Solutions and Management Consulting with
a well-established and diversified customer base spread over different sectors, which provides the
preconditions for creating attractive values for the company’s customers, employees and shareholders.
Acando does not provide earnings or sales forecasts.
Review report
This report was not audited.
INTERIM REPORT January 1–June 30, 2017
Acando AB (publ.)
www.acando.com 14 (24)
Assurance by the Board of Directors
The Board of Directors and the President provide their assurance that the interim report for January–June
2017 provides a fair and accurate view of the Parent Company’s and the Group’s operations, financial
position and earnings, and describes the material risks and uncertainties faced by the Parent Company
and other companies in the Group.
Stockholm August 17, 2017
Acando AB (publ.)
Ulf J Johansson Carl-Magnus Månsson
Chairman President and CEO
Caroline af Ugglas Cecilia Beck-Friis Lena Eliasson
Board member Board member Board member
Magnus Groth Anders Skarin Alf Svedulf
Board member Board member Board member
Mija Jelonek Åsa Lindström
Employee representative Employee representative
Additional information
For further information, please contact:
Carl-Magnus Månsson, President and CEO
+46 (0)8 699 70 00
Anneli Lindblom, CFO
+46 (0)8 699 70 00
INTERIM REPORT January 1–June 30, 2017
Acando AB (publ.)
www.acando.com 15 (24)
Upcoming reporting dates
Reporting dates
Interim report January–September 2017 October 27, 2017
Year-end report 2017 February 8, 2018
Note
This report comprises information that Acando AB (publ) is obliged to make public pursuant to the EU
Market Abuse Regulation and the Securities Market Act. This information was submitted through the agency
of the above contacts for publication on August 17, 2017 at 08:00 a.m. (CEST).
www.acando.com Ticker: ACAN
Acando is a consulting company that leverages an equal balance of specialist technical expertise and
human behavioral insight to innovate, streamline and mobilize organizations for sustainable change. The
Group has approximately 1,700 employees allocated over five countries. Acando had sales of more than
SEK 2 billion in 2016 and is listed on Nasdaq Stockholm.
Acando AB (publ.)
Vasagatan 16
Box 16061
SE-111 20 STOCKHOLM
Tel: +46 (0)8 699 70 00
Corp. Reg. No. 556272-5092
www.acando.com
INTERIM REPORT January 1–June 30, 2017
Acando AB (publ.)
www.acando.com 16 (24)
CONSOLIDATED INCOME STATEMENTApr - Jun Apr - Jun Jan - Jun Jan - Jun Jul 2016 - Jan - Dec
(SEK m) Note 2017 2016 2017 2016 Jun 2017 2016
Net sales 613 578 1,234 1,104 2,336 2,206
Other operating income 0 0 1 0 4 4
Total income 614 578 1,235 1,105 2,340 2,210
Operating expenses
Other external expenses -127 -127 -251 -247 -496 -492
Personnel expenses -428 -386 -846 -756 -1,584 -1,494
Depreciation of tangible assets -4 -3 -7 -5 -14 -12
Amortization of intangible assets 0 0 -1 -1 -2 -2
Operating profit 55 62 130 96 244 210
Profit from financial items
Financial income 8 0 17 1 18 5 22
Financial expenses -1 -1 -2 -2 -2 -3
Profit after financial items 55 78 129 112 247 230
Taxes on profit for the year -14 -16 -34 -26 -58 -50
Net profit for the period 41 62 95 86 189 180
Of which, attributable to shareholders of Acando AB (publ.) 41 62 95 86 189 180
Earnings per share
Before dilution, SEK 0.40 0.60 0.93 0.83 1.84 1.75
After dilution, SEK 0.39 0.60 0.91 0.83 1.81 1.72
Average number of shares before dilution 102,865,419 102,865,419 102,865,419 102,865,419 102,865,419 102,865,419
Average number of shares after dilution 104,407,419 102,865,419 104,407,419 102,865,419 104,407,419 104,407,419
Number of shares outstanding at end of period 0 0
before dilution 102,865,419 102,865,419 102,865,419 102,865,419 102,865,419 102,865,419
Number of shares outstanding at end of period 0 0
after dilution 104,407,419 102,865,419 104,407,419 102,865,419 104,407,419 104,407,419
Treasury shares are not included in the number of shares above. At June 30, 2017, 1,542,000 shares are owned by Acando.
These treasury shares are expected to be used for future allotment in ongoing share-savings programs.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEApr - Jun Apr - Jun Jan - Jun Jan - Jun Jul 2016 - Jan - Dec
(SEK m) Note 2017 2016 2017 2016 Jun 2017 2016
Net profit for the period 41 62 95 86 189 180
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss
Pension liabilities, actuarial gains on liabilities 0 - 0 0 -6 -6
Income tax pertaining to items in other comprehensive income 0 - 0 -0 1 1
Total items that will not be reclassified subsequently to profit or loss 0 - 0 0 -4 -4
Items that may be reclassified subsequently to profit or loss
Change in accumulated translation differences -3 6 -6 10 3 18
Total items that may be reclassified subsequently to profit or loss -3 6 -6 10 3 18
Other comprehensive income for the period, net after tax -3 6 -6 10 -2 14
Comprehensive income for the period 37 68 89 96 187 194
Attributable to:
Parent Company's shareholders 37 68 89 96 187 194
INTERIM REPORT January 1–June 30, 2017
Acando AB (publ.)
www.acando.com 17 (24)
CONSOLIDATED BALANCE SHEETJun 30 Jun 30 Dec 31
(SEK m) Note 2017 2016 2016
Non-current assets
Intangible assets
Goodwill 4 980 975 986
Other intangible assets 4 4 4
Tangible assets
Tangible assets 32 18 20
Financial assets
Deferred tax assets 1) 8 13 9
Other non-current financial assets 5 11 5
Total non-current assets 1,029 1,021 1,025
Current assets
Accounts receivable 531 467 537
Other receivables 7 9 9
Current tax assets 4 2 3
Prepaid expenses and accrued income 97 84 56
Cash and cash equivalents 56 64 72
Total current assets 696 626 678
Total assets 1,725 1,647 1,703
Equity
Share capital 5 144 144 144
Other capital contributions 740 740 740
Reserves -28 -30 -22
Retained earnings including profit for the period 254 198 290
Total equity 1,110 1,051 1,152
Liabilities
Non-current liabilities 6 40 48 37
Current liabilities 6 575 547 514
Total liabilites 615 596 551
Total equity and liabilities 1,725 1,647 1,703
INTERIM REPORT January 1–June 30, 2017
Acando AB (publ.)
www.acando.com 18 (24)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITYAttributable to Parent company shareholders Non-
Share Other capital Retained controlling(SEK m) Note capital contr. Reserves earnings interests Total
Opening balance at January 1, 2016 144 739 -40 235 0 1,078
Profit for the period - - - 86 - 86
Other comprehensive income for the period - - 10 - - 10
Total comprehensive income for the period - - 10 86 - 96
Dividend* paid to Parent Company shareholders - - - -123 - -123
Incentive programs - - - 1 - 1
Closing balance at June 30, 2016 144 739 -30 198 - 1,051
Profit for the period - - - 94 1 95
Other comprehensive income for the period - - 8 -4 - 4
Total comprehensive income for the period - - 8 89 1 98
Incentive programs - - - 2 - 2
Closing balance at December 31, 2016 144 739 -22 290 1 1,152
Profit for the period - - - 95 - 95
Other comprehensive income for the period - - -6 0 - -6
Total comprehensive income for the period - - -6 95 - 89
Dividend* paid to Parent Company shareholders - - - -134 - -134
Incentive programs - - - 3 - 3
Closing balance at June 30, 2017 144 739 -28 254 1 1,110
* Dividends payable on ordinary shares
CONSOLIDATED CASH-FLOW STATEMENTJan - Jun Jan - Jun Jan - Dec
(SEK m) Note 2017 2016 2016
Operating activities
Profit after financial items 129 112 230
Adjustment for items not included in the cash flow 11 -11 -15
Income tax paid -17 -6 -17
Cash flow from operating activities
before changes in working capital 123 95 197
Net change in working capital -27 -35 -73
Cash flow from operating activities 96 60 124
Cash flow from investment activities -19 -4 -14
Cash flow from financing activities -93 -87 -140
Cash flow for the period -16 -31 -30
Cash and cash equivalents at the beginning of the period 72 93 93
Exchange-rate differences in cash and cash equivalents 0 2 9
Cash and cash equivalents at the end of the period 56 64 72
INTERIM REPORT January 1–June 30, 2017
Acando AB (publ.)
www.acando.com 19 (24)
OPERATING SEGMENTS
(SEK m) Note Sweden Germany Norway Total Group total
Apr - Jun 2017
Net sales 408 101 104 0 613 0 613
Operating profit 48 8 5 0 61 -6 55
Financial income 0
Financial expenses -1
Profit after financial items 55
Taxes -14
Net profit for the period 41
Apr - Jun 2016
Net sales 399 87 91 0 577 2 578
Operating profit 51 8 10 0 69 -7 62
Financial income 17
Financial expenses -1
Profit after financial items 78
Taxes -16
Net profit for the period 62
Jan - Jun 2017
Net sales 809 204 221 0 1,234 0 1,234
Operating profit 103 23 17 0 143 -13 130
Financial income 1
Financial expenses -2
Profit after financial items 129
Taxes -34
Net profit for the period 95
Jan - Jun 2016
Net sales 765 169 177 3 1,114 -9 1,104
Operating profit 80 14 18 -4 108 -12 96
Financial income 18
Financial expenses -2
Profit after financial items 112
Taxes -26
Net profit for the period 86
Jul 2016 - Jun 2017
Net sales 1,530 407 406 0 2,343 -7 2,336
Operating profit1) 187 52 34 0 273 -29 244
Financial income 5
Financial expenses -2
Profit after financial items 247
Taxes -58
Net profit for the period 189
Jan - Dec 2016
Net sales 1,486 372 362 3 2,223 -16 2,207
Operating profit 164 43 35 -4 238 -28 210
Financial income 22
Financial expenses -3
Profit after financial items 230
Taxes -50
Net profit for the period 180
Financial items and tax are not allocated by segment
Discontinued
Operations
Group
adjustment
INTERIM REPORT January 1–June 30, 2017
Acando AB (publ.)
www.acando.com 20 (24)
KEY RATIOS Apr - Jun Apr - Jun Jan - Jun Jan - Jun Jul 2016 - Jan - Dec
(SEK m) Note 2017 2016 2017 2016 Jun 2017 2016
Result
Net sales 613 578 1,234 1,104 2,336 2,206
Operating profit (EBIT) 55 62 130 96 244 210
Net profit for the period 41 62 95 86 189 180
Margins
Operating margin (EBIT), % 9.0 10.7 10.5 8.7 10.5 9.5
Profit margin, % 8.9 13.5 10.4 10.1 10.6 10.4
Profitability
Return on capital employed, % 4 7 11 10 21 20
Return on equity, % 4 6 8 8 17 16
Financial position
Equity/assets ratio, % 64 64 64 64 64 68
Interest coverage ratio, multiple 98 90 101 71 99 82
Per share
Equity per share, SEK 10.62 10.22 10.62 10.22 10.62 11.02
Cash flow per share, SEK -0.27 -0.15 -0.15 -0.30 -0.14 -0.29
Earnings per share after dilution, SEK 0.39 0.60 0.91 0.83 1.81 1.72
Employees
Number of employees at end of the period 1,785 1,593 1,785 1,593 1,785 1,698
Average number of employees 1,768 1,596 1,691 1,668 1,770 1,721
Net sales per employee, SEK thousands 347 362 730 662 1,320 1,282
Investments
Net investments 2 7 13 11 35 33
INTERIM REPORT January 1–June 30, 2017
Acando AB (publ.)
www.acando.com 21 (24)
PARENT COMPANY INCOME STATEMENTApr - Jun Apr - Jun Jan - Jun Jan - Jun Jul 2016 - Jan - Dec
(SEK m) Note 2017 2016 2017 2016 Jun 2017 2016
Net sales 25 24 46 42 95 90
Total income 25 24 46 42 95 91
Operating expenses
Other external expenses -13 -14 -26 -25 -47 -53
Personnel expenses -5 -4 -8 -7 -23 -15
Amortization/deprication and impairment of intangible and tangible assets 0 0 -1 -1 -1 -1
Operating profit 5 4 8 5 16 13
Profit from financial items
Other interest income and similar items 8 39 17 39 18 65 44
Interest expenses and similar items 0 -1 -1 -1 -2 -2
Profit/loss after financial items 43 20 46 21 79 55
Taxes on profit for the year -1 -2 -2 -2 -4 -5
Net profit/loss for the period 42 19 44 19 75 50
PARENT COMPANY BALANCE SHEETJun 30 Jun 30 Dec 31
(SEK m) Note 2017 2016 2016
Non-current assets
Intangible assets
Other intangible assets 3 4 3
Tangible assets
Tangible assets 18 11 10
Financial assets
Financial assets 1,407 1,392 1,405
Total non-current assets 1,428 1,406 1,417
Current assets
Receivables from Group companies 41 10 14
Accounts receivable 0 0 0
Other receivables 0 0 0
Prepaid expenses and accrued income 10 14 3
Cash and cash equivalents 0 0 0
Total current assets 51 24 17
Total assets 1,478 1,430 1,434
0 0 0
Equity 0 0 0
Share capital 5 144 144 144
Statutory reserve 110 110 110
Share premium reserve 632 632 632
Retained earnings including profit for the period 158 212 245
Total equity 1,044 1,098 1,131
Libilities
Long-term liabilities 29 19 6
Liabilities to Group companies 307 207 242
Current liabilities 100 106 56
Total liabilities 435 332 304
Total equity and liabilities 1,479 1,430 1,434
INTERIM REPORT January 1–June 30, 2017
Acando AB (publ.)
www.acando.com 22 (24)
Notes
Note 1 Accounting policies and disclosures
The Group’s interim report was prepared in accordance with IAS 34 Interim Reporting and, for the Parent
Company, RFR 2. In all other respects, the accounting policies applied correspond with that stated in the
2016 Annual Report. Disclosures pursuant to Paragraph 16A of IAS 34 appear in the financial statements
and their accompanying notes, and in other parts of this interim report.
Rounding off has been carried out in some cases, which means that tables and estimates do not always
add up exactly.
Note 2 Estimates and assessments
In preparing the financial reports, the Board of Directors and company management make assessments
and assumptions that affect the company’s earnings and financial position, as well as published information
in other respects.
Estimates and assessments are continuously evaluated and are based on historical experience and other
factors, including expectations regarding future events deemed reasonable under prevailing circumstances.
Actual outcomes may differ from the assessments made.
The areas in which estimates and assumptions could involve significant risk of adjustments of carrying
amounts for earnings and financial position in future reporting periods are primarily assessments of market
conditions, assessment of the useful lives of the Group’s intangible and tangible assets, impairment testing
of goodwill, measurement of deferred tax assets, measurement of accounts receivable and revenue
recognition for fixed-price projects.
For a complete account of the important estimates and assessments affecting the Group, refer to the 2016
Annual Report.
Note 3 Risks and uncertainties
Acando’s business risks include price levels, customer undertakings, changed customer requirements,
weaker demand for consulting services, customer concentration and changes in the behavior of
competitors, as well as currency, credit and interest-rate risks. Continued growth will depend on Acando’s
ability to develop, retain and recruit qualified employees and maintain personnel costs at a reasonable level
in relation to prices offered to customers. A strong economy entails intensified competition for qualified
employees.
Acando’s general view of business risks has not changed, compared with the detailed statement contained
in the “Risks and Opportunities” section in the Directors’ Report under the 2016 Annual Report.
Note 4 Goodwill
Compared with June 30, 2016, goodwill increased by a total of SEK 5 m. Of this amount, SEK 6 m pertained
to the acquisition of Brickmakers in the Germany segment, which was completed in Q4 2016, and the
remainder was attributable to currency effects.
Note 5 Equity
At June 30, 2017, the total number of shares in the company amounted to 104,407,419, of which
100,767,429 were Series B shares and 3,639,990 were Series A shares. No buy-backs have taken place
INTERIM REPORT January 1–June 30, 2017
Acando AB (publ.)
www.acando.com 23 (24)
in 2017. The total number of treasury shares thus amounted to 1,542,000 Series B shares as of June 30,
2017.
Note 6 Liabilities
Long-term liabilities
Long-term liabilities primarily comprise pension liabilities in Sweden and deferred tax.
Current liabilities
Of the current liabilities of SEK 575 m, SEK 83 m represents interest-bearing short-term debt in the form of
utilized credit of SEK 64 m and the current portion of acquisition loans of SEK 19 m.
Note 7 Financial Instruments
Acando measures financial instruments at fair value or amortized cost in the balance sheet depending on
the instrument’s classification. Financial instruments comprise claims, and cash and cash equivalents
among assets and interest-bearing liabilities, and accounts payable among liabilities.
Note 8 Financial income
The purchase consideration for the redemption of minority shares pertaining to the acquisition of Connecta
in 2014 was settled through arbitration in 2016. The arbitration board set the purchase price at the price
given by Acando and which the company had paid in conjunction with advance possession. Due to
uncertainty regarding the likely outcome, a higher amount had been booked as a short-term debt and was
reversed in full in Q1 2016 with a positive impact on net financial items. The above action had no impact
on Acando’s liquidity.
Financial income in the Parent Company primarily pertains to dividends from subsidiaries.
Note 9 Acquisitions and discontinuations
As part of focusing all operations to the EU, Acando made an agreement to sell the delivery center in India,
including the associated Swedish holding company, in Q1 2016. The buyer was the management of the
Indian company who acquired the holding company and the operations were transferred to the buyer as of
March 1, 2016. For clarity, the outcome for the January–February 2016 period was recognized as the
results of discontinued operations in the segment notes and in the table on page 6. Acando estimates that
gathering all volumes into one unit in Latvia will generate economies of scale and that the proximity of
outsourcing in Europe contributes actively to increased profitability for these types of deliveries. The
operations are not significant for Acando.
In Q4 2016, Acando in Germany acquired a majority holding in the company Brickmakers Gmbh. The size
of the company means it has no material impact on the Group’s financial statements.
Note 10 Related-party transactions
No transactions have taken place between Acando and related parties that have had any material impact
on the company’s position or earnings.
Note 11 Significant events after the end of the period
No significant events occurred after the end of the period.
INTERIM REPORT January 1–June 30, 2017
Acando AB (publ.)
www.acando.com 24 (24)
Matching alternative performance measures
Certain financial metrics presented by Acando in the interim report, which are not defined in accordance
with IFRS, are known as alternative performance measures. Acando’s considered opinion is that these
metrics provide complementary information to investors and the company’s management, since they
enable the evaluation of trends and the company’s performance. Since not all companies calculate financial
metrics in the same manner, these metrics are not always comparable with those used by other companies.
Therefore, these financial metrics should not be viewed as replacements for metrics defined under IFRS.
The definition of performance measures are described in Acando's Annual Report for 2016 on page 75,
including the full year figures for 2016. The figures for the period are found in the statements and under the
heading Financial position in this report.
Other definitions
Average number of employees The total number of employees at the start of the period plus the total at the end of the period divided by
two.
Growth in local value Sales increase relative to comparison period sales, adjusted to changes in exchange rates during the same period weighted by percentage of sales.
Net sales per employee
Net sales for the period divided by the average number of employees.
Project assignments
Projects in which Acando had a higher degree of delivery responsibility for jointly established targets, often
associated with close cooperation with the customer. Project assignments do not necessarily involve a
higher commercial risk content in the form of a fixed-price assignment.